Myth: The value that is ascertained by the appraiser is required to be equivalent to the market value.
Reality: It is probable that Texas, like most states, validates the suggestion that the assessed value is the same as the market value; however, this is not always true.
Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an prolonged period.
Myth: The buyer or the seller will have impact in the cost of the property depending upon for whom the appraiser is working.
Reality: The opinion of value of the house does not affect the salary of the appraiser; as such, the appraiser has no pressured interest in the price of the house. This means that he will provide business with impartiality and objectivity regardless of for whom the appraisal is created.
Myth: The replacement cost of the home will be on par with the market value.
Reality: The way market value is derived is based on what a buyer would likely pay a willing seller for a home without being under duress from any external group to buy or sell.
The replacement cost is the dollar amount needed to reconstruct a home in-kind.
Myth: There are specific methods that real estate appraisers use to determine the opinion of value of a property, like the price per square foot.
Reality: There are many numerous processes that an appraiser will use to make a full investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the sales prices of recently sold comparable properties.
Myth: In a robust economy - when the sales prices of houses in a given neighborhood are reported to be increasing by a certain percentage - the values of individual houses in the vicinity can be expected to increase by that same percentage.
Reality: An increase in value of a specific property has to be concluded on an individualized basis, factoring in information on comparable houses and other relevant considerations.
It doesn't matter if the economy is doing well or declining.
Myth: The home's exterior is determinate of the actual value of the house; it is unnecessary to do an interior inspection.
Reality: To conclude a solid value beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and market trends.
Obviously, none of these things can be derived simply by looking at the house from the exterior.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance real estate, they own their appraisal.
Reality: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that purchased the appraisal.
By the Equal Credit Opportunity Act, any home buyer asking for a copy of the report must be provided with one by their lending company.
Myth: There's no point for consumers to even worry about what the report contains so long as their lending institution is fine with the contents therein.
Reality: It is almost imperative for consumers to check over a copy of their appraisal so that they can verify the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal report can serve as a record for the future, as it contains an exorbitant amount of data - including, but certainly not limited to the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the area.
Myth: Appraisals are ordered only to assess house values in house sales involving mortgage-lending transactions.
Reality: Appraisers can have many different qualifications and designations which allow them to perform a lot of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Reality: A home inspection serves a completely different purpose than an appraisal report.
An appraiser finds an opinion of value in the appraisal process and resulting appraisal.
The task of a home inspector is to approximate the condition of the home and its major components, then create a report on these conclusions.